FEWLing the Growth Food, Energy and Water nexus for Livelihood Security in India - Yes Bank
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FEWLing the Growth
Food, Energy and Water nexus for
Livelihood Security in India
TITLE FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India
YEAR February, 2018
Chandan Bhavnani, Himanshu Shekhar, Nitesh Chandra, Arnesh Sharma, Parajdeep Singh
AUTHORS
Dhillon (Responsible Banking, YES BANK)
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FOREWORD FEWLing the Growth: Food Energy and Water nexus for Livelihood Security in India Food Energy and Water nexus for Livelihood Security in India form the three quintessential resources that are critical to fuel economic growth and ensure livelihoods, underpinning achievement of 75% of the Sustainable Development Goals (SDGs). These three hold the key to an equitable and sustainable future, especially for India, which have the potential to be the second largest economy by 2050 with a GDP of USD 42 trillion in Purchasing Power Parity. By 2050, with a population of 1.7 billion people, India would require 30% increase in food production and face 32% increase in water demand from 2017 levels. Further, more than 880 GW of new power generation capacity would be needed by 2040. The challenge of Food, Energy and Water security in India is, thus, going to be a decisive factor in India’s development story. Food, Energy and Water have an intricate network of inter-linkages and interdependencies running across the economy. This results in transcendence of vulnerabilities in one resource to the other two. Such complex and dynamic interactions among the three resources, coupled with the increasing demand and constrained supply, exacerbated by climate change, necessitates a paradigm shift from the conventional fragmented approach to a nexus approach in managing these resources. The report titled “FEWLing the Growth: Food Energy and Water nexus for Livelihood Security in India”, highlights the positive policy signals and actions on ground by private sector towards an integrative approach on managing FEW resources. The report provides national and global best practices on leveraging the nexus, centered on overall resource efficiency and livelihood generation. These case studies hold huge potential for replicating and scaling the nexus approach in current policy and business landscape to create maximum impact. The report outlines a strategy-risk-return model for mainstreaming the nexus approach, with strategies targeted at effective mitigation of vulnerabilities and risks to livelihood through an integrative approach, while leveraging innovative technological and financial solutions for optimum returns. The report charts an implementation roadmap with four critical elements for FEWLing the growth of nexus approach -Framing enabling ‘nexus-sensitive’ policies, Establishing innovative business models and financing mechanisms, Weighing the trade-offs and exploring synergies between the sectors and Leveraging the power of partnerships to achieve FEWL security. I am confident that this report will provide important insights for policy makers, industry, communities and all relevant stakeholders in integrating Food-Energy-Water nexus approach throughout the economy, with an objective of ensuring livelihood security and identifying mutually synergic responses to India’s developmental challenges. Thank You. Sincerely, Rana Kapoor Managing Director & CEO Chairman
EXECUTIVE SUMMARY
In the backdrop of the birth of the 7 billionth human, the former United Nations Secretary General
Ban Ki-moon gave a historic address at the 66th General Assembly, which emphasized the need
for connecting the dots between climate change, water scarcity, energy shortages, and food
security. This appeal for providing a holistic solution for the Food, Energy and Water (FEW) security
challenges is especially relevant for India today. The country’s ambitious economic and policy targets,
including the predicted high GDP growth of 8%, 175 GW of renewable energy and the Sustainable
Development Goals (SDGs), are impeded by challenges like burgeoning population, falling water
tables, high dependence on conventional sources of energy and low agricultural productivity. These
challenges can however be met if ‘FEW’ is considered as a nexus.
This report, “Food Energy and Water nexus for Livelihood Security of India” portrays the need for
recognizing the FEW nexus and its management as a means to achieve livelihood security. This need
is evident in India by the resource constraints faced in these sectors, because of the demand side
factors (such as overpopulation, rapid urbanization and industrialization) and supply side factors
(such as dwindling resource stocks and climate change). While the necessity of a unified approach
becomes ever more critical, there are some systematic challenges that might delay this uptake,
including the lack of a universally accepted framework for FEW integration, low penetration of
proven modern technologies, cross departmental and State Government coordination and more
importantly, lack of proper financing structures.
FEW
Though the nexus of Food-Energy-Water is Integration
yet to be recognized formally by the Central
or State Governments, a number of measures, Seasonality
both by the government as well as private sector Technology
Integration
propagate the integrated well-being of more
than one sector. This is evident from the policy
landscape of agriculture, water, energy and Risks Shocks
industrial sectors, where a number of forward Strategies
looking policies ensure that achieving resource
efficiency in the respective sectors does not Development
Initiatives Returns Public
lead to negative impacts in others. Similarly, Finance
business response to the externalities in FEW
sectors have been encouraging, especially
amongst industries highly dependent on FEW
resources, like food processing, power and iron Blended Private
Finance
& steel. Finance
Taking learnings from local and global application of FEW nexus approach, this report delves into
the process of mainstreaming it in India, to not only provide efficient utilization of resources, but to
generate livelihoods. Mapping the shocks and seasonality risks associated with livelihoods to the
availability of the FEW resources, strategies for the implementation has to be holistic. Generation
of livelihood opportunities would need to be enabled by cutting edge technology and its end to
end integration, guided by the policy and institutional framework. Leveraging latest technologies like Information Communications & Technology (ICT), Internet of Things (IoT), blockchain and other cloud based solutions to ensure efficient utilization of resources and supportive policy framework are enablers to such technologies. Finance as a sustainability catalyst has a tremendous potential. Conventional financing tools, like subsidies and tax holidays, in conjunction with emerging tools and techniques, like Public Private Partnerships (PPP), blended finance and capital markets can act as facilitators of FEW nexus approach to generate livelihood. For successful implementation of a nexus approach throughout the economy, framing enabling policies, establishing innovative business models and financing mechanisms, weighing the trade- offs and exploring synergies between the sectors and collaborations among all key stakeholders is imperative. With the suggestions and opportunities presented, this report aims to focus the efforts of policymakers and businesses alike in recognizing the FEW nexus and framing appropriate response to ensure proper resource utilization and livelihood generation. Namita Vikas Group President & Global Head, Climate Strategy & Responsible Banking Distinguished Fellow
C O N T E N T S
1. Introduction 11
1.1 Food-Energy-Water nexus 13
1.2 Need for FEW nexus approach in India 13
1.3 Implementation Challenges 15
2. FEW nexus approach in India 17
2.1 Policy landscape 18
• FEW nexus Approach in Agriculture 18
• FEW nexus Approach in Energy 20
• FEW nexus Approach in Water 20
• FEW nexus Approach in Industry 21
2.2 Business Response 22
• Food processing 22
• Power 23
• Iron & Steel 24
3. Global Applications of FEW nexus Approach 27
Case Study 1: India 28
Case Study 2: Mexico 29
Case Study 3: Kenya 30
Case Study 4: Australia 30
4. Mainstreaming FEW nexus approach for livelihood 33
4.1 Risks and Vulnerability Context 34
4.2 FEW Resource Assets 35
4.3 Strategies for improving livelihoods – FEW Approach 35
4.4 Finance as a Sustainability Catalyst 37
• Conventional financing tools 37
• Emerging Financing Tools for FEW 37
Conclusion 45
References 47
1
Introduction
FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India 111
Introduction
The year 2017 marked the 2nd anniversary of the adoption of the Sustainable Development Goals
(SDGs) and the Paris Agreement. The world congression at the One Planet Summit witnessed
policymakers, businesses and civil society unanimously reiterating the need for a low carbon and
sustainable future. Incidentally, the year also witnessed losses of USD 330 billion from natural
catastrophes globally, affecting 40 million people in South Asia alone during the monsoon floods
(Munich RE, 2018). Clearly, the increasing rate of natural calamities, fueled by climate change, need
dedicated efforts and cooperation from multiple stakeholders to secure the future of the planet
and ensure well-being of future generations.
Globally, SDGs provide a blueprint for achieving transformational change, through collaboratively
addressing development priorities in a resource constraint world. If we look at the shared challenges
currently faced by the world, Food, Energy, Water and Livelihoods (FEWL) clearly emerge as cross-
cutting thematic areas that will be instrumental in achieving 75% of the total 17 Global Goals. This
makes consideration of Food-Energy-Water-Livelihood even more critical in the Indian sustainable
development context.
India has made rapid strides in socio-economic development in recent years and has emerged as
a global power, with the country tipped to be the world’s fastest growing major economy in 2018
(World Bank, 2018). However, the challenges of poverty, food security, clean water and energy
access for all, still persist. Currently, India ranks at 100th position in the Global Hunger Index among
119 nations, worse than many smaller Asian peers (Global Hunger Index). Over 311 million Indians
still live without access to electricity (Banerjee, et al., 2015) and 63 million without the access to
clean sources of water for their daily usage in rural areas (Stewart, 2017). Additionally, per capita
availability of land, water and other natural resources continue to shrink at an alarming rate, while
the country’s demand for critical resources is rising with the growing population. Fueling future
growth for a young and growing population, without degrading natural resources, is indeed a
fundamental development challenge for our country.
12 FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India1.1 Food-Energy-Water nexus
Food-Energy-Water (FEW) resources are critical to human existence and industrial production, and
their security is paramount to sustaining livelihoods in the country. These critical resources are
inextricably linked to each other, with an action / intervention in one area often impacting others.
These two-way relationships between the three resources create challenges in managing them.
Therefore, it is important that these sectors are viewed from a nexus approach to understand
the considerations of their linkages and inter-dependence, essential for integrated resource
management. This dynamic relationship among the food, water and energy sectors is depicted in
the Figure 1 below:
Figure 1: Food-Energy-Water nexus
Energy for Water Food for Water
• Pumping / Supply Water • Prevents surface
• Water / Waste water runoffs
treatment • Root system
purification
Water for Energy Water for Food
• Hydropowe • Irrigatiopn
• Thermal Energy • Fisheries
production process • Animal Husbandry
• Food processing
Energy Food
Food for Enery Enegy for Food
• Bio fuels • Harvesting
• Food waste to Energy • Transportation
1.2 Need for FEW nexus approach in India • Food processin
Achieving Food-Energy-Water security, amidst dwindling supply of land, water and other vital
ecosystem resources, poses significant challenges for a developing country such as India. Grappling
with issues of affordability and equitable distribution of Food-Energy-Water for all, India is poised
to face an unprecedented demand for these resources. The various influencing factors or drivers
of change affecting the demand and supply of FEW resources and the key trends are summarized
in following table 1.
FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India 13Table 1: Influencing factors for FEW Resources
Factor influencing Key Trend
Demand
Population Growth In the past 70 years since independence, population of India has more than
quadrupled from approximately 330 million in 1947 to 1.34 billion in 2017 and
is expected to increase to 1.51 billion by 2030, peaking at 1.68 billion by 2061
(UNDESA/Population Division 2017).
Rapid Urbanization and India is moderately urbanized with 31.1% of population living in urban areas,
improved standard of which is expected to grow to 50% by 2051 (MoUD, 2017).
living Rapid economic growth has led to an improved standard of living for India
with the per capita income growing by six times between 1990 and 2016
(World Bank, 2016).
Industrialization India’s ambition to increase the share of manufacturing in its GDP from 17.1%
to 25% by 2022 (IBEF, 2017) is expected to further drive significant energy and
water demand.
The Indian agriculture is also expected to increase mechanization from the
current level of below 50% (Business Today, 2016).
Resource Constraints India is set to become a water scarce country by 2025 (study conducted by
EA water), with per capita availability of water going down to 1341 m3 in 2025
and 1140 m3 in 2050 (PIB, 2017).
India is heavily dependent on importing its sources of energy, with an import
dependence of 34.3% of total energy use, which is expected to go up to 59.3%
by 2047 (Niti Aayog, 2015).
India’s crop yield of 3721 kg/ha is much lower than the world average of 4548
kg/ha, requiring additional land resources to meet its growing food needs
(NITI Aayog, 2015).
Ground water, which forms the major source for fresh water, is depleting at an
alarming rate.
Climate Change Recent studies at the Indian Agricultural Research Institute indicate the
possibility of a loss of 4-5 million tons in wheat production in the future with
every rise of 1°C temperature throughout the growing period (Shrivastava,
2016).
Rice production is slated to decrease by almost a tonne per hectare if the
temperature rises by 2°C (Shrivastava, 2016).
Many power plants in India, such as the 2600 MW Tiroda plant in
Maharashtra, had to shut down temporarily in 2016 due to a lack of water,
with such instances likely to increase in future (IEA Clean Coal Centre, 2017).
These influencing factors exert pressure on India’s resource consumption, especially the FEW
resources. With competing demand for these inter-linked resources, an important aspect of
effective management and driving efficiency, while minimizing negative trade-offs, would be to
minimize conflicts among the three resources. Instead of managing food, energy and water in silos
through stand-alone policies and funding instruments, promoting greater synergies is required to
promote integrated and holistic cross-sectoral development.
An instance of the nexus impact of policies taking a ‘silo’ approach is the traditional support of
State policy towards improving yield, through subsidization of agriculture inputs including power
for pumping water, in the form of electricity and diesel and agricultural inputs like fertilizers and
chemicals.
14 FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in IndiaThe energy tariffs for irrigation purpose have been heavily subsidized, with 20 States subsidizing
it more than 50% and just one State of Tripura charging more than average cost of power from
agriculture (Figure 2).
Figure 2: Indian states subsidizing electricity for farmers, (IndiaStat 2014) (*calculations based on
28 states present in 2013-14)
4%
25%
25% Full Subsidy
Subsidy between 50 & 100%
Subsidy between 0 & 50%
No Subsidy
46%
Such policies have led to depletion of water resources and misuse of electricity, and have not been
able to improve the agricultural productivity beyond a threshold (NITI Aayog, 2015). Groundwater
pumping and other agricultural practices account for 17.3% (MOSPI, 2017) of total electricity
consumed in the country, and the groundwater table has seen depletion in 65% of the wells
tracked (CGWB, 2016).
It is apparent that the conventional approach of individually managing Food-Energy-Water is not
the best option in view of the rising strain on these resources. On the contrary, an integrated
FEW nexus approach opens up new opportunities that can be leveraged through adoption of
innovative technologies and solutions. For instance, ‘System of Rice Intensification’ is a technique
of rice cultivation without flooding fields, which has benefitted farmers in Andhra Pradesh, Tripura,
West Bengal, and several others states. The technique provides higher yield of rice, while requiring
half the amount of water. This comprehensive technological and implementation push by state
policies provides a clear and compelling case to look at Food-Energy-Water holistically.
1.3 Implementation Challenges
Adopting a FEW nexus approach from a policy and corporate strategy standpoint has clear
advantages. However, the progress towards implementation has not been very fast paced and the
scope has been limited. Some of the barriers towards mainstreaming this approach include:
• Lack of a universally accepted framework for FEW integration: Various studies have explained
the nexus and the multiple interdependencies, but evaluation of project / policies against a
nexus approach remains limited (Pittock, et al., 2015) (Endo, et al., 2017) (Endo, et al., 2015).
The frameworks available present a qualitative evaluation of the impacts (Rasul, 2016) on
various economic activities or are very strongly related to a particular implementation. A
simpler framework for evaluating the risks and opportunities may be needed for deeper
understanding of the nexus approach among decision makers and businesses alike.
The frameworks may also provide simple comparison amongst the available solution
choices
FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India 15• Low penetration of proven modern technologies: The penetration of FEW effective modern
technologies is still very low in India. For example, India has just 5.5% integration of Micro
irrigation systems, (ICAF, 2015) which are proven to have multiple benefits including saving
in terms of water and energy and increasing area under irrigation. There is a clear need to
assess the barriers in adoption of efficient technologies and address them for large scale
penetration
• Cross departmental and State Government coordination: The interdependencies amongst
the FEW resources make it imperative to work across different departments and ministries.
The FEW resources also involve both Central and local Government departments in effective
management. Therefore, a nexus of departments, or a steering committee of different
authorities may be required for effective impact assessment and decision making
• Lack of proper incentive structures and enhanced financial viability: The incentive structures
needs to be reoriented to promote synergies between the inter-dependent sectors and all
the actors should come together with their blended expertise to commit financial support
in piloting and scaling financially viable and environmentally sustainable projects
Thus, in order to surmount the pressing need of managing resources, economy and livelihoods
more effectively, nimble policies coupled with innovative business solutions are required to
overcome implementation challenges and create an enabling environment for effective transition
to a sustainable Food-Energy-Water nexus approach.
16 FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India2
FEW nexus Approach
in India
FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India 172
FEW nexus Approach in India
The constraints on Food-Energy-Water resources, with apparent impacts on the livelihood have
stimulated both the Government and corporates to start integrating the nexus approach for
promoting resource efficiency. This is evident from the current policy landscape and business
responses.
2.1 Policy landscape
Livelihood generation and improvement has always been at the center of the policy objectives
of both the Central and State Governments. As agriculture remains the backbone of livelihoods
in the Indian economy, with 44.3% of the population (World Bank, 2017) being dependent on it
directly or indirectly, and agriculture being the biggest consumer of water, the FEW policies are of
immense importance in the sector. India is also witnessing the manifestation of FEW nexus aligned
policies in other sectors including energy, water and industries. The recent budget for FY 19 also
highlighted the policy emphasis on improving farmer income.
FEW nexus approach in Agriculture
Given the need for resource efficiency in the agriculture sector, and to enhance the livelihood of
farming families, Government has undertaken radical policy initiatives including Hon’ble Prime
Minister Shri Narendra Modi’s call for ‘More Crop, Per Drop’. Consequently, the new agriculture
policy (RRTD, 2017) earmarked sustainable agriculture and effective utilization of water and
chemical inputs as one of the key objectives.
18 FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India• Focus on creation of climate resilient production systems for crops
National and animal husbandry
Mission on
• Identifies 10 key dimensions for promoting suitable agricultural
Sustainable
practices
Agriculture
(NMSA) • ‘Water use efficiency’, ‘Nutrient Management’ and ‘Livelihood
diversification’ form 3 important dimensions
• Focus on ‘Har Khet Me Pani’ and ‘More Crop Per Drop’
Pradhan Mantri • 99 major/medium irrigation projects (irrigation potential of 76.03
lakh ha) have been identified for completion in phases by December
Krishi Sinchai
2019
Yojana
• Enhance adoption of precision-irrigation and other water saving
technologies
National Project • PKVY promotes organic farming through a cluster approach along
on Organic with Participatory Guarantee Scheme (PGS) to ensure the integrity of
Farming (NPOF) products
& Paramparagat • NPOF focus on providing the necessary capacity building, standards
Krishi Vikas creation, quality control and low cost certification of organic
Yojana (PKVY) produce
• Promote Integrated Nutrient Management (INM) through
appropriate use of chemical fertilizers and regulation of
Soil Health micronutrients to boost production
Management
(SHM) • Soil Health Card are used to recommend ways to improve the soil
quality, decide appropriate dosage of nutrients for improving soil
health and fertility
National • Focus on restructuring and strengthening agricultural extension of
Mission on modern efficient technologies
Agricultural • Promote use of Information and Communication Technology (ICT)
Extension and and popularization of modern technologies to increase efficiency
Technology • Capacity building and institution strengthening to promote
(NMAET)
Solar • Provide capital linked subsidy schemes for solar pump adoption
Photovoltaic • Initial target of 1,00,000 solar pumps across India with financial
Water Pumping support of INR 400 crores
systems for • 31,472 solar pumps installed in 2014-15, higher than total number of
Irrigation pumps installed in the last 24 years
FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India 19FEW nexus approach in Energy
India is primarily dependent on fossil fuels to meet its energy requirement, with electricity
generation capacity mostly being thermal. But in the recent past, India has witnessed a surge in the
renewable energy mix that aligns with the FEW nexus approach to a great degree. With multiple
benefits including addressing energy security and very low water consumption compared to fossil
fuel technologies, renewable energy is being fuelled by ambitious targets and supporting policies.
Supporting Renewable Energy Policies
• Ambitious renewable target of 175 GW capacity by 2022, contributing to 6%
of the total power supply (IESS)
• Policies like Jawaharlal Nehru National Solar Mission (JNNSM) and
establishment of solar parks have been instrumental in creating a favorable
environment
New Hydro Policy (Draft)
• Seeks to declare all hydro power as renewable energy, irrespective
of its size
• Hydro Power Obligation benefit to projects attaining Commercial Operation
Date (COD) within specified period
• Interest subvention during construction / post commissioning with funding
pattern on grant basis
National Policy on Bio-fuels (Draft)
• Use of surplus food grains to augment production of Ethanol
• Indicative target to blend 20% ethanol in petrol and 5 % bio-diesel in diesel
by 2030
• The policy also encourages production of second generation biofuels
through viability gap funding
India’s renewable energy push has created 6,21,000 employment opportunities in 2016 (IRENA,
2017) and is expected to generate more than 3,30,000 new jobs over the next five years. Renewable
energy holds enormous potential to tackle poverty in rural communities by providing steady
incomes, healthcare benefits, and skill-building opportunities to unskilled and semi-skilled workers
(CEEW, 2017).
FEW nexus approach in Water
Among the FEW resources, water is the most vulnerable resource, and has led to conceptualization
of schemes, policies and programmes in water sector, that align well with the FEW nexus concept.
Some important ones are:
20 FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India• Arrest the pollution of Ganga river and revive it through developing
‘Namami Gange’ industrial effluent and sewage treatment infrastructure
(National
• Consolidate existing ongoing efforts into a concrete action plan
Mission
for Clean • Focus on ensuring minimum ecological flow, promoting tourism &
Ganga) shipping and Ganga knowledge management
• Targets linking Indian rivers with a network of canals and reservoirs
Interlinking • Increase water availability for drinking and irrigation
of Rivers • Requires heavy infrastructure investment needs to the tune of INR
(ILR) 5.5 lakh crores
• Creation of sustainable cities with effective resource and waste
100 Smart management
Cities Mission & • Municipal bond Programme, with 2% interest subsidy aiming to
Municipal revive municipal bonds market
Bond Program • Pune Municipal Corporation issued INR 200 crores bond to fund
water metering project
• Rajasthan became the first state to instate a sewage and waste
Emerging water policy in 2016
Waste Water • Jharkhand has also come up with waste water policy in 2017
Management
Policies
The water policies have been concentrated on enhancing the availability of water for drinking
and agricultural purposes, with multiple impacts such as creation of alternative occupation
opportunities like fisheries, tourism, and transport, thereby boosting livelihoods.
FEW nexus approach in Industry
Industries are crucial in livelihood creation and economic growth. With the growing resource
scarcity and impacts of climate change, Government has been active in strengthening the sector
through augmenting productivity, while addressing resource inefficiencies. MSMEs form the most
important sub-segment to focus on, with over 51 million units in India and accounting for a
workforce of 117 million (Ministry of MSMEs, 2017).
FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India 21• Promote sustainable production technologies
Zero Effect,
• Integrate resource efficiencies with quality and productivity,
Zero Defect
spanning across all manufacturing and service industry sectors
(ZED)
• Special focus on micro, small and medium enterprises (MSME)
• Partial Risk Guarantee Fund for Energy Efficiency (PRGFEE) for
creating bankable energy efficiency projects
Energy
• Partial Risk Sharing Facility (PRSF) for MSMEs to promote ESCO
Efficiency
financing model
Initiatives
• Venture Capital Fund for Energy Efficiency (VCFEE) to provide ‘last
mile’ equity capital to energy efficiency projects
• The draft National Steel Policy envisages a water requirement of
1,500 million m3 per annum for the steel industry by 2030-31
Emerging
• Focus to support initiatives for conservation of both water and
Sector Specific energy
Policies
• Aims to set international standards for pollution and water
consumption for the Indian steel industry
Augmenting resource efficiency while limiting environmental impacts has been the cornerstone of
FEW aligned policies in industries.
2.2 Business Response
The corporate sector is a bulk consumer of Food-Energy-Water for its processes, while also
generating livelihoods and contributing 29.02% share to India’s GDP (Statistic Times, 2017). The
sector has been key to transforming these FEW resources and creating a variety of products for
human consumption. FEW resources is a key cost driver in corporate processes, and their security
remains of paramount importance to the survival of these industries.
Indian corporates have also started taking note of the risks associated with the scarcity of FEW
resources. As per a survey conducted by Carbon Disclosure Project, 55% of respondents believed
that water is impacting their business and more than half of the reporting companies had a water
policy, strategy or management plan in place (CDP, 2014).
Some of the industries which face immediate scarcity of FEW resources, and their response to this
scarcity is discussed:
Food processing
Food processing is one of the key industries which improves the life and quality of food available
for human consumption. The Ministry of Food Processing Industries has identified it as high water
and energy consuming industry (MOFPI, 2017) having a significant environmental impact. The
22 FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in Indiacompanies have initiated innovation for conservation of these resources through focused action,
to entail multiple business benefits like reduced cost and reduced risk from future scarcity. Some
of these include:
• Saving water and energy by migrating towards low water consumption processes
• Using organic food waste to generate biogas
• Recycle waste water for alternative industrial / irrigation processes
Dabur striving for resource efficiency including water and energy
Dabur India Limited (DIL), one of the leading food processing companies in India, has been
working aggressively for water and energy stewardship. In FY-16-17, DIL has taken steps to
reduce water consumption in their manufacturing operations through establishing Effluent
Treatment Plants (ETP) to recycle and reuse water and to ensure that no water is discharged outside
the boundary. Over the FY 2015-16, DIL has substantially reduced its raw water consumption by
11%, increased treated effluent reuse and recycle by 9%, reduced hazardous waste generation
by 47% and increased energy efficiency leading to 24% reduction in greenhouse gas emissions.
These productivity improvement and resource saving initiatives have resulted in savings of INR 3
Crores for the company (Dabur India Limited, 2016-17).
Power
Power generation is one of the most water intensive industries and depends heavily on water
security. The various sources of power account for different water usage in their production and
cooling process (Figure 3).
Figure 3: Water operational use by energy type
Water Consumption for Operational use by Energy Type
Natural Gas Coal Nuclear Photovoltaic
(Utility Scale Solar)
0 to
4 to
1,170 1,100 100 to
875
0to5
Gallons per MWH Gallons per MWH Gallons per MWH Gallons per MWH
*Type of Cooling System Largely Determines the Consumption of Water for each Energy Soource
Source: http//aquasec.org/wp-contet/uploads/2011/09/macknick-etal-2012-water-electric-generation-coefficients-erl.pdf
FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India 23The sector has also realized the extensive cost of water in power generation and has been using
technology-based solutions including:
• Changes in cooling technology, from Cooling Towers (highest consumption) to water
efficient cooling technologies like Dry Cooling (lowest consumption)
• Use of grey water for cooling technologies
• Changes in energy mix from thermal based generation to renewable based generation
National Thermal Power Corporation (NTPC)
diversifying into renewables
NTPC has started focusing on renewable energy for diversification, considering their abundant
supply and least environmental impacts. In FY 2007, NTPC’s 27 GW power generation capacity
was based only on fossil fuels. Now, with ambitions of evolving as the country’s largest green
power producer, NTPC’s present 51 GW capacity includes 12 renewable energy projects (NTPC,
2017).
Iron & Steel
Iron and Steel industry has very high consumption of two critical resources of energy and water.
The energy consumption of Indian steel plants ranges in 6 - 6.5 Giga Calorie per tonne of crude
steel, as compared to 4.5 - 5 in steel plants abroad (Ministry of Steel, 2017). Various initiatives
taken by the industry to reduce water and energy intensity of the sector include:
• Improvement of water use efficiency in processes (using software and state of the art tools
to measure water consumption in processes)
• Switching to high energy efficient technologies which also reduce water consumption
Tata Steel adopting green technologies
in steel making
Tata Steel has commissioned several energy efficient and environment friendly technolgies
in order to reduce its input costs and environment impacts, while boosting productivity in
steel making. It has re-established its environmental stewardship in steel manufacturing
with introduction of India’s biggest clean coke producing facility at Kalinganagar Industrial
Complex in Odisha (BusinessLine, 2017). This facility is commissioned with environment friendly
Coke Dry Quenching (CDQ) unit that use an inert gas to cool hot coke, replacing conventional
water spray method which results in high CO2 emissions and thermal energy loss. The process is
supported by waste heat recovery system to generate electricity from the captured heat,
increasing resource efficiency considerably. This environment-friendly technology will help in
reducing carbon-dioxide emission to the extent of 0.11-0.14 tonnes per tonne of coke and dust
emission to the tune of 300-400 gm per tonne of coke.
24 FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in IndiaOther manufacturing industries including pulp and paper, cement and textiles have also adopted
modern practices and technologies to manage their food, energy and water consumption. The
service sector has also been active in reducing their food wastage, water and energy consumption.
Industries operating from commercial buildings are adopting green building codes, which reduce
the energy and water consumption considerably in the building.
Though the FEW nexus approach has made its way into the policies and strategies of both the
public and private sector, it remains in its incipient stage, requiring further action in scaling up FEW
interventions and approach across the economy.
FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India 2526 FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India
3
Global applications of
FEW nexus approach
FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India 273
Global applications of
FEW nexus approach
Governments and the corporates are natural partners in incorporating the FEW nexus approach
in most socio-economic processes. While we have seen how the policies and strategies have
been directed towards achieving resources efficiencies, a multi-stakeholder collaboration may be
required for reaping all the benefits of the nexus approach.
The following section presents four case studies from India and across the globe on how
applying technologies and processes with incorporation of FEW factors and working with diverse
stakeholders has led to multiple benefits. These projects solve multiple FEW issues, and serve as
replicable and scalable solutions based on a nexus approach, with clear livelihood impact.
Case Study 1: India
World’s first solar irrigation farmer cooperative
Dhundi is an agrarian village in Kheda district of Gujarat. Water for irrigation is provided
mainly by pumping groundwater. This pumping is undertaken either through subsidized
electricity at INR 0.7/kWh, prone to over use, or through diesel powered pump sets sold at a very
high price of INR 400/ bigha/ watering, reducing agriculture margins. The introduction of solar
pumps to reduce the subsidy burden allowed the pump owner to sell water at INR 200 / bigha /
watering leading to over use of ground water resources. In order to provide sustainable water
pumping solution, by reducing dependence on subsidized electricity and also reducing groundwater
wastage through sale of excess electricity (Business Standard, 2017), the State Government with
its discoms introduced the net metering policy to allow the farmers to sell excess electricity
back to the grid. To leverage this opportunity, a farmer-led initiative Solar Pump Irrigators’
Cooperative Enterprise (SPICE) came together to install six solar pumps with a total capacity of
56.4 kWp. The members contributed INR 5,000/kWp for the installation of the pumps, with the
28 FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in Indiarest being undertaken as a research grant by International Water Management Institute (IWMI)
and Consultative Group on International Agricultural Research (CGIAR) Research program on
Climate Change, Agriculture and Food Security (CCAFS) (Tushaar Shah, 2016). The Cooperative
also signed a 25-year Power Purchase Agreement with Madhya Gujarat Vij Company Limited
(MGVCL) at INR 4.63/ kWh to sell excess electricity back to the grid. The revenue generation
from the solar pumps nudges the farmer to use the water pump only till it is required, and
feeding back the rest to the grid, creating incentive for efficient use of groundwater and energy
resources.
The project led to multiple benefits for farmers, since the 56.4 kWp installation is expected to
generate 85,000 kWh/year, of which approximately 40,000 units would be used by the farmers
and the other 45,000 units could fetch the farmers an additional income of INR 3 lakh per
annum, which was more than the their investment in the first year itself. The irrigation from the
pumps and further income from selling power would be available to the farmers free of cost
for next 25 years. The utility saves on the subsidized power for which it has to bear the cost of
INR 4.5 / kWh, against a recovery of INR 0.7/ unit. In a span of 25 years, MGVCL can save upto
INR 8.17 lakh per annum and generate renewable energy from the net metering for complete
85,000 kWh. The solar pumping sets also save the carbon emission from diesel pumps / grid
electricity. The case study depicts that enabling policy (net metering), financial support
(subsidies and grants) and community involvement has enabled better irrigation for farmers,
saving ground water and promoting clean energy, while also providing an additional source of
income for farmers.
Case Study 2: Mexico
Leveraging Water – Energy linkages to achieve efficient water management, energy utilization
and livelihood generation (WaCClim, 2017)
Mexico’s urban water management sector contributes significantly to its overall greenhouse gas
(GHG) emissions. Considered together, drinking water, wastewater and end user heating contribute
up to 5% of Mexico’s total GHG emissions. Given the growing urbanization, the utilities across
Mexico were not able to provide basic water and waste water collection services at affordable price
to users. Water and Wastewater Companies for Climate Mitigation (WaCCliM) piloted a project
with a water supply service agency and a wastewater treatment plant along with the support
of Government bodies and relevant departments. The project interventions at the international
level involved creation of Energy Performance and Carbon Emissions Assessment and Monitoring
(ECAM) tool to quantify emissions from the sector. At the national level, improved political,
regulatory and institutional framework was developed like putting national mitigation targets
for Water and wastewater sectors, including indirect carbon emissions from energy efficiency
measures in pumping and aeration process to feed into Mexico’s NDC targets (Mestre, 2015).
These interventions were backed by introducing appropriate financing instruments for adoption
of energy efficiency and developing partnerships among utilities to strengthen their capacities and
technical know-how. At the utility level, capacity building was undertaken, technology upgradation
in terms of energy efficient pumps and activated sludge technology for producing biogas from
wastewater was installed and ECAM tool was used for continuous tracking.
FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India 29All these interventions led to increased wastewater coverage for an additional 52,000 inhabitants; wastewater collection and treatment increased from 48% to 81%, reduced emissions equivalent to 2,500 tCO2e/ year, biogas production of 400 Nm3 / year (energy saving of 71 MWh / year), reduced energy use by 20% and 31,600 m3 / year wastewater reused. The case highlights the interdependence in usage of energy and water in an urban set up and an integrated approach to use municipal wastewater to generate electricity through generation of natural gas and further channelization of water for other urban / industrial purposes. The reduced cost to utilities and increased penetration of water services provided better lives & livelihoods for cities in Mexico. Case Study 3: Kenya Renewable Energy Solutions for Lake Victoria Ecosystems (RESOLVE)- Bringing Wind/Solar power to Lake Victoria fishing communities (Renewable World, 2017) The region near the lake Victoria is non-cultivable and the population depends on fishing for their livelihoods. The fishing also has to be done during the night as the days are hot and sunny. Additionally, due to absence of adequate preservation techniques, the fish produced gets spoiled before reaching the consumer. The region is not connected to the grid and power source is a critical limiting factor for the community’s social and economic development. In order to improve the livelihood of Kenyan fisherman community, six micro grids were installed to power deep freezers. The involvement of the community was ensured by establishing Community Based Organization (CBO) to manage and maintain the energy hubs in each community and formation of Savings and Credit Cooperative (SAACO) to provide a mechanism that coordinates learning, improves collective savings & cross lending across the communities and attracts external financing for the maintenance and development of new energy hubs. The project has been instrumental in alleviating the livelihood and living conditions of the entire fishing community of the region, as they now have access to freezers to keep their stock fresh. As a result, the average household income levels have increased by 9.4%. Average monthly expenditure of a household on energy for lighting has decreased by more than 50% and use of solar-charged lantern for night time fishing has improved the health and safety of the fishermen by removing the kerosene pressure lamps from boats. Case Study 4: Australia Addressing the complete Food-Energy-Water nexus while sustaining local livelihoods by Sundrop Farms Port Augusta is situated in an arid, dry climate of Southern Australia, with degraded pasture lands unfit for conventional agriculture. The lack of available resources has enabled Sundrop Farms to produce vegetables sustainably on a 20 hectare facility by using a number of innovative technologies in conjunction. The farm utilizes a solar thermal unit with 25,000 computer controlled mirrors to generate electricity to run the farm, desalinate the seawater to produce fresh water and salt and use the waste heat to control the temperature of the green house. The freshwater produced is used for irrigation of tomatoes and high productivity is ensured through temperature controlled greenhouses. 30 FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India
As a result of these interventions, the facility produces over 16,000 tons of carbon neutral,
freshwater neutral tomatoes annually. About 260 jobs were created during the expansion of the
farm, and the farm employs 200 employees for day-to-day operations (Bookmyer, 2016). Sundrop’s
technology achieves significant energy and pollution savings compared to traditional methods
including approximately 26,000 tons of carbon dioxide per year (equivalent to removing 500 cars
from our roads), more than 450 million liters of freshwater per year (equivalent to 180 Olympic
size swimming pools) and more than 2 million liters of diesel per year (equivalent to driving a car
around the equator 500 times). The integrated solar thermal power plant is an excellent example
of innovative technology, which can transform the landscape through active support from private
sector, investors and policy makers and align with the FEW nexus to generate livelihoods as well
as business profit.
Based on the various insights from the four case studies, the next section focuses on steps that
India can take to ensure adoption of FEWL nexus becomes a norm, rather than an exception.
FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India 3132 FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India
4
Mainstreaming FEW nexus Approach
for Livelihood
FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India 334
Mainstreaming FEW nexus
Approach for Livelihood
Food-Energy-Water resources are required for a range of domestic, industrial and environmental
purposes. Availability, accessibility and affordability of any of these resources can act as a limiting
factor for proliferating livelihood opportunities, thereby restricting economic growth. Rapid
industrialization, urbanization and population growth in India leading to an increased demand for
FEW resources has resulted in growing pressure on the fast depleting natural resources.
4.1 Risks and Vulnerability Context
Given the inter-linkages and constraints, livelihoods across
India are drastically affected in terms of sustainability and Risks and Vulnerability
shocks. Typically, shocks are categorized as household 1. Shocks
level or idiosyncratic shocks and community level or covariate
a. Household Level
shocks. While idiosyncratic shocks include illness, injury and
unemployment; community level shock include disasters, b. Community Level
epidemics and conflicts. Further, macro-environmental or c. National Level
national level shocks may impact livelihood opportunities
2. Seasonality / trends
due to sudden variances in energy resources’ costs and their
availability, impact of resource imports/exports, change in
political leadership and regulatory framework.
Apart from the one-time impact of shocks, the resources are also subject to a variety of trends
and seasonality. Major driver for estimating the future demand for food, water and energy is the
impact of weather conditions, as weather plays an important role in the fluctuation of energy
consumption throughout the year. Additionally, the variability of daily water consumption during
summer season is 1.2 – 1.6 times higher than the average annual daily consumption (A. Hussien, et
al., 2018). While the seasonal variability for water and energy is documented, most studies address
only the consumption during a particular period of the year (Costa et al., 2013). The seasonal
variability in food consumption is expected to be greater specifically in the developing countries,
where the price of the most food commodities varies seasonally (Leonard and Thomas, 1989).
34 FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India4.2 FEW Resource Assets
The extent of FEW resources determines the growth and livelihood opportunities that a nation
or society would support. While these natural assets / resources may provide a foundation for
growth, it would require the following assets / capital for its optimal utilization Twigg, 2015:
• Human Capital: skills, knowledge, ability to labour, good health
• Physical / Manufactured Capital: livestock, transport, tools and equipment, shelter, water
supplies and sanitation
• Financial Capital: income and savings, earnings, credit, remittances
• Social Capital: networks and connections, membership of groups, relationships of trust,
reciprocity and exchange, political systems and governmental processes
Further, livelihood enhancement and management strategies need to be aligned to policies,
processes and institutions. The focus of these policies, process and institutions is to reduce
livelihood related risks while promoting resilient opportunities by anticipating and planning for
changes of different kinds and adapt to them. Such interventions should build on existing coping
and livelihood strategies.
The Union Government has already embarked upon the ambitious plan of doubling farmer income
as a part of enhancing livelihood security for over 80 million (PIB, 2017 ) farming families, dependent
of agriculture. This is a landmark step which integrates FEW with livelihoods. In the past, the focus
has been on improving agriculture output and achieving food security, which resulted in India’s
food production growing by 3.7 times and 45% increase in per person food production (Chand,
2017). Theoretically, it may imply that with the high growth of farm output, the income of farmer
would also have increased. However, this is not a generic trend which was observed, as the farmer
incomes did not grow in proportion to the increasing output. A recent study reveals that over 33%
of farmers in Punjab are below poverty line (Pandhi, 2017). Earlier in 2014, a similar study revealed
that 80% of farmer in Haryana are under poverty line (Sharma, 2014). National Sample Survey
Office (NSSO) data further suggests that over 22% of Indian households employed in farming are
under poverty (Chand, 2017).
4.3 Strategies for improving livelihoods – FEW Approach
Ensuring sustainable livelihood for all requires strategic planning and execution of a holistic
strategy, which can improve livelihood opportunities and address vulnerabilities. Generation of
livelihood opportunities need to be enabled by coupling technology and finances, guided by the
policy and institutional framework.
FEWLing the Growth: Food, Energy and Water nexus for Livelihood Security in India 35Development initiatives and policies to Technology improvement will be critical
drive improved productivity: to achieving better yields through improved
• Access to quality seeds, fertilizers varieties, breeds, practices, knowledge &
and pesticides for improved yields innovation and cost reduction. Government
has deployed a network of ‘Krishi Vigyan
• Availability of irrigational water Kendras’ in every district to provide last mile
• Reliable electricity supply connectivity of technologies, developed by
• Support to produce more than one the public research
crop/livestock
Technology, especially the digital technology can play a very important role in the allocation of
resources through big data collection, storage and analytics. One of the biggest drawbacks in
predicting demand and formulating related policies is the lack of data. As the price of data collection
technologies reduces through the use of modern sensors, India may utilize this opportunity to
develop innovative technologies for collection, analysis and effective utilization of this data. For
example, the amount of water required for crops in different months, and electricity generated
through hydroelectricity and thermal power plants can help prioritize the flow of water based on
the value derived from each activity, thereby reducing the impact of seasonalities.
Leveraging Information Communications & Technology (ICT), Internet of Things (IoT), blockchain
and other cloud based solutions should be the next step in the nexus approach. For example, a
WATERIG hub is a decentralized water and energy collection point. Such tech-based, connected and
decentralized systems ensure transparency in allocation of resources and can be scaled to achieve
resource efficiency through a nexus approach. Adequate financial support from Government and
private sector is required for such technology solutions to become more widespread in India.
Blockchain powered Water-Energy Hubs (Dale, 2017)
The winner of the Massachusetts Institute of Technology (MIT) SOLVE Sustainable Urban
Communities challenge, WATERIG is a start-up company that focuses on developing
decentralized water and energy solutions. A water and energy collection hub can collect energy
from the surrounding environment including solar, wind, waste energy and ground cooling,
which is used to produce 2,000 litres per day. Modules around the hub can be provided with
access to that energy and water for vertical farming, greenhouse growth, rainwater processing,
water purification, and algae farming.
WATERIG has incorporated 2 blockchains for:
• Tracking the ownership of each hub, enabling community-level crowdfunding and
micro-ownership, without a central authority
• Collecting data on water, food production, and usage transactions by its members to
grow a local
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